The changing face of the OP industry

The impact of COVID has been felt globally by all industries and sectors - but, how has it impacted the OP industry? Broadly, what is likely to happen going forward? What changes are here to stay? How are dealers going to succeed in the ‘new normal’? We asked the industry

Aidan McDonough, CEO, Integra

After the catastrophic impact of COVID-19 on our industry, members are slowly seeing signs of recovery. Those members with care homes and NHS contracts have clearly fared better during the pandemic. The opportunities within cleaning, hygiene and infection control, together with the WFH category, will remain for some time.

In terms of trends, health and wellbeing in the home office will start to become a hot topic of conversation as temporary set ups become more permanent. Ergonomic office products, technology and home office furniture solutions will continue to be areas of opportunity. Sustainability will be on the agenda for the foreseeable future, until change happens, and it becomes the norm. Environmental products, reduced/ reusable or recyclable packaging, and services that reflect a consumer’s aspirations to be as sustainable as possible will become more and more important.

More now than ever, independent dealers will need to continue diversifying their product and service proposition, positioning themselves as a business solutions provider. Our focus as a dealer group is on creating new opportunities - from medical supplies, PPE and workwear to value added services and education. We are continually expanding our diversification programme available to members. With the right people and skills, together with the desire and ability to adapt to change, dealers will recover and thrive.

We are likely to see further consolidations amongst vendors, dealers, dealer groups and back office providers, with an inevitable increase in business failures. On this note, Integra is here to support any independent dealer at this particularly difficult time. Through our i-merge platform we can help find, match and support dealers wanting to buy or sell a business.

Alex Dunn, MD of Superstat

There’s a saying that whatever doesn’t kill you makes you stronger and, since January when we were talking about ‘survival of the fittest’, we’ve seen a lot of businesses tested to the limit, and beyond. A lot of manufacturers were hit when SPOT went into administration and they will be concerned about one wholesaler dominating. Likewise, dealers might be concerned about being crowded in with all of their local competitors, national super-dealers, and online and managed services players all pushing the same offering.

People have been predicting some kind of shake up in the industry for years, and the dealers we talk to have always said that what they want from a wholesaler is simply to deliver products when they say they will, at a sensible price. Now that something major has happened, it risks leaving a monopoly in the broad range wholesale space, and points to a more compact, low overhead, distributor model being the way forward.

But there are also lots of positives - the way dealers have embraced new opportunities, and risen to the recent challenges, shouldn’t really surprise anyone - but it has been phenomenal. No doubt there will be more consolidation and upheaval to come, but the resilience, adaptability and entrepreneurialism shown by dealers over the last few months, coupled with the rise of streamlined, low-cost distributors, should stand them in good stead for future success.

A lot of dealer principals have been very hands-on within their own businesses during the lockdown - in many cases, more than they have been since they first started - and it’s given them a chance to take a close look at their own operations and think about how they might best operate in the future. I’m sure we’ll see more consolidation, and dealers looking to streamline their operations, whilst embracing new opportunities - but in a profitable way, looking at the net profit line not just the sales and gross profit.

We’re looking at a bigger recession than 2008, and I’m not convinced sales of traditional office products will ever return to pre-COVID levels, so the ability to adapt and sell new ranges will be the defining factor. I don’t know exactly why the trend towards home-working should mean less consumption of the more traditional products, but I think it will; at the same time we’re likely to see an accelerating shift towards tech products and the dealers who can position themselves to make the most of these trends will win out.

Julie Hawley, MD of Office Friendly

Over the last few years digitalisation has facilitated a new type of online buyer and change in business practices had started to happen with the more progressive players in the market. In the last few months this change has accelerated for everyone due to the dramatic shift to a virtual office environment through homeworking. Business owners have had to tear up their existing business plans and throw themselves into emergency mode, solving multiple problems, daily, in order to survive.

Several months on and that initial wave of panic may have subsided but it has left many with a ‘What now?’ A thirst for knowledge about performance and new industry KPIs has emerged as new business plans are starting to be formulated.

Many agree that homeworking is here to stay for the majority of employees so products aimed at this market - including tech, ergonomics, furniture and consumables - that all blend with the home environment are key. Health and safety products for the general public, including cleaning, signage and PPE, will be the norm.

Where jobs are lost, new ones will be created with the expanding requirements for health and safety - and mental health, which cannot be ignored. Investment in customer care is crucial to retaining business, along with use of tech platforms, including social media sites to enhance the customer experience; such investment will be rewarded with repeat orders.

Recovery will come slowly over the next 18 months so now is the time to review your digital presence and enhance your customers’ experience.